White paper lays out reform strategy for US medicines supply chain

US think tank Pew Health Group has called for a wide-ranging overhaul of the US pharmaceutical distribution system, including the introduction of a federal serialisation system, in order to protect consumers from unsafe medicines.

All actors in the supply chain come under scrutiny in the report, which is called After Heparin:  Protecting Consumers from the Risks of Substandard and Counterfeit Drugs. The key findings were generated at a high level conference organised by the charity in March 2011.

The 116-page white paper - which can be downloaded here - concludes that the US Congress must institute reforms to ensure that the US Food and Drug Administration has greater powers - particularly to oversee foreign manufacturing facilities - and that industry is held accountable for the security and safety of "increasingly globalised and outsourced supply chains."

Manufacturers are asked to implement more robust quality systems and monitor outsourcing partners and suppliers more closely, and should be forced by law to improve the documentation and transparency of upstream supply chains.

The FDA should be given the authority and resources to oversee drug safety on a global scale, and should boost its oversight of bulk drug substances to prevent a recurrence of the heparin incident in 2007-2008, which caused dozens of deaths in the USA due to an adulterant that had been introduced during manufacture of the active ingredient in China.

Pew predicts that outsourced manufacturing of active pharmaceutical ingredients (APIs) will increase from a $22 billion market in 2009 to almost $35 billion in 2014, while outsourced finished drug product production will almost double from $22 billion to nearly $40 billion over the same period.

Wholesalers should be subject to strong regulation and oversight, and the US distribution chain as a whole should operate within a "federal serialisation and verification system."

The report includes a number of case studies which it claims provide evidence of the frailties in the current supply chain system, including Baxter relying on an earlier audit by a different company when choosing Scientific Protein Laboratories–Changzhou (SPL-CZ) as the supplier of its heparin bulk material, and the FDA's approval of the Chinese company as a supplier without a pre-approval inspection.

It also cites a case involving Indian generic drugmaker Ranbaxy, which was blocked by the FDA from importing medicines made at a facility in Paonta Sahib in 2008. Aside from the fact that the problems were first noted three years before the import block was imposed, the FDA was tipped off by a Ranbaxy whistleblower, rather than its own inspection efforts, and was hampered by its inability to subpoena witnesses and documents for violations of the Federal Food, Drug, and Cosmetic Act (FDCA).

Other case studies cover issues such as false labelling for ingredients which concealed unapproved manufacturing plants, antibiotics sourced from undisclosed manufacturing sites and the Panamanian incident involving contamination of cough syrup with an industrial solvent.

The largest body of recommendations in the report concern the FDA, and specifically boosting its ability to monitor overseas manufacturing.  The agency should significantly increase the rate of overseas inspections, based on risk assessment criteria, "but no plant should go uninspected indefinitely," says Pew, which also calls for unannounced inspections of foreign plants.

Additional finances to help fund the higher level of inspections could come from new industry, importers and the public purse.

The FDA should also gain much stronger enforcement measures, for example the authority to order rather than request drug recalls and the power of subpoena, while criminal and civil penalties for violations of the FDCA should be increased.

Finally, the pharmaceutical distribution system needs an overhaul to defend against diversion, counterfeiting and theft, says Pew, which recommends a comprehensive drug tracking system based on unique serial numbers on medicine packs and a "uniform federal system for verification of distribution transaction history."

Many of the overarching themes of the Pew report have been covered in other documents, including the March report by the Obama Administration's Intellectual Property Enforcement Coordinator (IPEC) Victoria Espinel (see IPEC report lays out US strategy on counterfeit medicines), as well as a number of bills tabled in Congress in recent years aimed at boosting the FDA's authority to protect the supply chain.

The FDA has already stepped up efforts to monitor overseas plants, by opening up new offices in China, India and other emerging manufacturing hubs for example and increasing the number of foreign inspections by 27 per cent. It also recently set up a dedicated office to handle supply chain security issues.

Meanwhile, industry has stepped up to the plate with initiatives such as Rx-360 and the EXCIPACT programme, which are trying to improve oversight of upstream ingredient suppliers and alleviate the inspection burden through measures such as shared audits and third-party certification of suppliers.

Against that backdrop, the Pew report provides a comprehensive (and commendable) analysis of pharmaceutical distribution frailties which - thanks to a high level of detail - provides both a history of the problem and a manual of how to proceed in securing the system.

"More can - and must - be done to ensure the safety of upstream pharmaceutical manufacturing, to provide the FDA with essential authorities and resources to exercise effective oversight and to improve the security of downstream pharmaceutical distribution," says Pew.